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Tuesday, 13 August 2013

POSITION TRADING

POSITION TRADING:that trading
method is used when the trader is going to make a decision within a given
context or certain criteria whileINTRADAY TRADINGis
strictly mechanical.

A Position Traderis going to
hold his position for a long time frame from months to years. It’s really a
safe way of investing with a relatively small amounts of capital.

DISADVANTAGE OF POSITION TRADING

Your trades might take months and the profits will only barely be able
to cover your cost of overhead.

Day Trader: This type of trader is more skilled and
flexible as Intraday trading requires experience – lots of it – especially
focusing on order entry techniques and a deep understanding of exit points as
he is trying to make profits from a small change in prices with rapid trades
during the trading day.

And usually he tries to close all his positions before the market closes
and doesn’t leave any open positions overnight. Intraday traders base their
trades on strategies such asSwing trading, arbitrage,
candlestick patternsandtrend lines.....

As I mentioned before, they attempt to profit from small – short term –
movements so it would be difficult to earn large sums without large amounts of
investment capital or the use of high leverage. These traders also spend a lot
of money on commissions so they must gain enough from their trades to make
profits after commissions.

Day Trading is also known as “the get rich quick strategy” and the
biggest advantage of this trading style is that you can have many more trading
opportunities than a position trader.

DISADVANTAGES OF INTRADAY TRADING

You need a lot of experience and very precise
execution.

You need to dedicate most of your time to trading and trading related
activity, and that time is going to be difficult and stressful.